Japanese group awarded Saudi shale gas project

25 August 2015

System A to be followed by larger expansion to supply mining operation in north of the kingdom

  • JGC Gulf International awarded contract for shale gas project System A
  • System A has capacity of at least 50 million cubic feet a day of gas
  • System B has alse reportedly been tendered

JGC Gulf International, a Saudi Arabia-based subsidiary of Japan’s JGC Corporation, has been awarded a contract to develop a shale gas project in the north of the kingdom.

MEED reported earlier this year that JGC was vying with Canada’s SNC Lavalin for the contract to build the ‘System A’ shale gas project for state-owned oil company Saudi Aramco.

A source from JGC confirmed the company had been awarded the engineering, procurement and construction (EPC) contract but did not disclose the value of the award.

Aramco plans to establish the capacity to produce 200 million cubic feet a day (cf/d) of gas in Turaif to supply a power plant at the nearby Waad al-Shamal phosphate mining development.

The System A tender had an initial capacity of 50 million cf/d of gas. However, a Reuters report citing industry sources claims this has been increased to 66 million cf/d.

The EPC contract was tendered in November 2014, but the bid deadline was extended several times until proposals were submitted in May 2015.

The scheme is being tendered on a lump-sum turnkey basis and is being offered as an in-kingdom EPC only. This means all the engineering and project management must be carried out by personnel based in Saudi Arabia.

The initial scope of works in the tender included the EPC of 10 wellheads, 10 two-kilometre, 6-inch flowlines, scraping facilities and a metering station. A gas-gathering facility will also be built, which will include an inlet manifold, high- and low-pressure inlet separators, compressors and a dehydration unit. A pipeline connecting the gas-gathering centre to Waad al-Shamal will also be built.  

At Waad al-Shamal, a control centre will be built, along with process and control equipment. Enough space will be left to accommodate four more gas-gathering centres in the future.

All the surface facilities are also expected to be skid-mounted, meaning they can be transferred elsewhere when the reservoirs have depleted.

Saudi Aramco has prequalified companies for System B and the tender was reportedly floated in June. The System B project will install additional facilities to bring the capacity of the shale gas development to the planned 200 million cf/d.

Contractors are expected to submit bids for System B in September.

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